Commissioner of C. Ex. Vs. Kothari Products - Court Judgment

Excerpt:
1. this appeal is at the instance of revenue. respondents, manufacturer, filed an application for refund of a sum of rs. 51,279/- alleging that duty at a higher value was paid while the value realised was lesser. the contention is that instead of taking the assessable value of the goods for bhiwandi the manufacturer wrongly took the assessable value of the goods meant for hyderabad which was higher. on account of this, rs. 51,279/- happened to be paid in excess. this claim was negatived by the adjudicating authority by refund order no.27-refund/ack/iii/97 dated 28.05.1997. on the grounds that the party's claim for different assessable value for different regions is not acceptable to the department, in view of the board's letter f. no.6/25/93-cxi (order no. 24/14/93-cxi) dated 31.12.1993 and that duty incidence had been passed on by him to the buyers. manufacturer took up the matter in appeal. appellate authority by order-in-appeal no.161-ce/knp-i/98 dated 26.06.1998 allowed the appeal, holding that incidence of duty was not passed on to the customers. this order is under challenge.2. we heard id. dr and id. counsel representing the manufacturer. we have perused the records and dispose of the appeal.3. the appellate authority in the impugned order came to the conclusion that incidence of duty had not been passed on to the customers, because there was only transfer of stock by the appellants to their c and f agents to bhiwandi who had charged only so much price from the customers which was effective for that area. no document was produced in this case to support this conclusion. the fact that manufacturer transferred stock to their c and f agents is a finding arrived at by the commissioner from no acceptable evidence. in such a situation, we are not in a position to agree with him that only so much price as was payable by the customers of bhiwandi was realised by the manufacturer.there is nothing on record to show that manufacture had not, in fact, passed on the incidence of duty to customers. therefore, his claim for refund is not tenable on the basis of principles of unjust enrichment.4. the order passed by the commissioner allowing refund is set aside.appeal is allowed.

Judgment:
1. This appeal is at the instance of Revenue. Respondents, manufacturer, filed an application for refund of a sum of Rs. 51,279/- alleging that duty at a higher value was paid while the value realised was lesser. The contention is that instead of taking the assessable value of the goods for Bhiwandi the manufacturer wrongly took the assessable value of the goods meant for Hyderabad which was higher. On account of this, Rs. 51,279/- happened to be paid in excess. This claim was negatived by the adjudicating authority by refund Order No.27-Refund/ACK/III/97 dated 28.05.1997. On the grounds that the party's claim for different assessable value for different regions is not acceptable to the department, in view of the Board's letter F. No.6/25/93-CXI (Order No. 24/14/93-CXI) dated 31.12.1993 and that duty incidence had been passed on by him to the buyers. Manufacturer took up the matter in appeal. Appellate authority by order-in-appeal No.161-CE/KNP-I/98 dated 26.06.1998 allowed the appeal, holding that incidence of duty was not passed on to the customers. This order is under challenge.

2. We heard Id. DR and Id. Counsel representing the manufacturer. We have perused the records and dispose of the appeal.

3. The appellate authority in the impugned order came to the conclusion that incidence of duty had not been passed on to the customers, because there was only transfer of stock by the appellants to their C and F agents to Bhiwandi who had charged only so much price from the customers which was effective for that area. No document was produced in this case to support this conclusion. The fact that manufacturer transferred stock to their C and F agents is a finding arrived at by the Commissioner from no acceptable evidence. In such a situation, we are not in a position to agree with him that only so much price as was payable by the customers of Bhiwandi was realised by the manufacturer.

There is nothing on record to show that manufacture had not, in fact, passed on the incidence of duty to customers. Therefore, his claim for refund is not tenable on the basis of principles of unjust enrichment.

4. The order passed by the Commissioner allowing refund is set aside.

Appeal is allowed.